History of Medicare Insurance

Medicare insurance plans form part of a health insurance program, managed by the United States government, which is available to those in the United States, aged 65 and over, or who are under 65 and have certain permanent physical disabilities, or who meet other specific criteria.  The program was first established in 1965 and there have been numerous changes to the program since then.  It is mostly funded by Medicare taxes on employers and workers.

The ‘Original Medicare Insurance’ plans as they are known provide for the scheme to pay most of Medicare approved healthcare costs with the remainder being covered by premiums paid by those enrolled in the program.  Those enrolled can elect to take out a ‘Medigap’ policy, also known as Supplemental Medicare Insurance, which will provide payments to cover much of these Medicare premiums.  These Medigap insurance schemes are offered by private insurance companies who themselves charge a premium for their policies.

Go here for more information about Supplemental Medicare Insurance.

 Medicare Advantage Plans

Since 1997 there has been a growth in a different type of Medicare insurance plan, now known as a ‘Medicare Advantage’ Plans in which private insurance companies, approved by Medicare, provide insurance policies which substitute for the Original Medicare plans.  If you join a Medicare Advantage plan then that plan is required to cover all the services provided the Original Medicare Plan, except hospice care.

So Medigap insurance plans are not the same as Advantage plans.  Medigap plans cover the gaps not included in the Original Medicare plans while choosing an Advantage plan means that you have access to what is covered by the Original Medicare plan through an Advantage plan.

 

Eligibility for Medicare

To be eligible for Medicare you must be:

• Aged 65 or over and legally resident in the United states for 5 years;
• Aged under 65 and disabled and receiving Social Security benefits;
• Aged under 65 and getting dialysis for end stage renal disease or need a kidney transplant.

 

What Services are Covered by Medicare

Medicare Insurance plans are structured around 4 Parts.

Part A

Part A covers Hospital Insurance, which includes: inpatient hospital stays, semi-private rooms, meals, general nursing, and drugs used as part of your inpatient care.

Most people don’t usually pay a monthly premium for Part A services if they and their spouses have paid Medicare taxes while working.  Those ineligible for free access to Part A can buy access under certain conditions.

Part B

Part B covers Medical Insurances such as doctors’ professional services, laboratory tests, outpatient care and some preventive services.  Part B normally requires a monthly premium and it is possible to opt out of the Part B plan.  However if you decline to enroll in Part B during the due enrollment period you may be subject to financial penalties if you subsequently change your mind and apply for enrollment.  In 2011 the Part B premium for those earning $85,000 or less was $115.40 per month with higher levels of premium depending on your income.

Part C

Part C is what is now known as Medicare Advantage plans

Part D

Part D covers Prescription Drug Plans which are effectively an insurance plan for those enrolled in Part A and B to gain access to defined prescribed drugs, without paying the full cost each time.  The plan is administered by private insurance schemes.

 Go here for more information on Medicare Advantage plans.

Medigap Insurance Plans for Arizona

This is an overview of Medicare Insurance plans.  There are other articles which look specifically at Supplemental Medicare Insurance and Medicare Advantage plans.

This website has no affiliation with nor is it endorsed by any insurance company or agent. For more information on medicare insurance go to www.medicare.gov.